Preparing for a PERA Retirement

The following timeline suggests some general items to consider before you retire.

Five to Ten Years Before Retirement

• Attend a PERA Benefit Information Meeting, and/or a Group Workshop. You will have the opportunity to ask questions and obtain general information about retirement.

• Be sure to review your PERA Annual Member Statement each year. If you see that the information differs from what you think it should be, contact PERA.

• Review PERA brochures on subjects such as taxes, health care, and Social Security.

• Evaluate whether you should participate in a Section 125 or Transportation Equity Act plan during the years that your salary will be included in your Highest Average Salary (HAS) calculation.

• Re-examine your financial goals, reduce your debt, and adjust your savings and other investments to meet your goals. If necessary, obtain the financial and legal advice you may need to plan your estate.

• Use the Colorado PERA retirement benefit calculator and retirement planner programs to estimate your retirement benefit or request a benefit estimate from PERA.

• Consider purchasing service credit to increase your benefit and/or retire earlier.

• Request a PERA PIN from PERA if you do not already have one. You may run different retirement scenarios on PERA’s secure Web site with the use of your PERA PIN/User ID and password.

Two to Four Years Before Retirement

• Request a benefit estimate from Social Security if you are eligible for a benefit. For information on how your Social Security benefit may be reduced based on a PERA benefit, see the PERA & Social Security brochure.

• Attend another PERA Benefit Information Meeting, and/or a Group Workshop, to stay informed of changes to PERA benefits.

• Complete your purchases of service credit. You have until the earlier of your termination of employment or retirement to have your purchases completed. However, it is a good idea not to wait until immediately prior to retirement.

• Review your health care costs and options carefully—they may affect your decision of when to retire. Use the PERACare Premium Inquiry for Retirees to review current premiums for plans available to you through PERA.

One Year Before Retirement

• Attend a PERA Retirement Process meeting for updated information on your PERA benefits and request a current benefit estimate. You may also watch the Online Retirement Process presentation.

• Decide on the date you wish to retire. Check with your personnel office about their retirement procedures.

• Evaluate health care and PERA life insurance coverage. You must be enrolled in life insurance prior to retirement. If you are not enrolled, you may enroll during the spring open enrollment period.

• Determine what to do with the money in your voluntary tax-deferred retirement investment plans such as 401(k), 457, 403(b), and IRAs, including the PERAPlus 401(k) and 457 Plans.

Three to Six Months Before Retirement

• Request a PERA Retirement Application Kit—review the material thoroughly, then complete and send the appropriate forms to PERA. The following forms and publications are included in the Kit:

• Annual Increases
• Direct Deposit by Electronic Funds Transfer (EFT)
• Final Six Months’ Salary Report
• PERA & Social Security
• PERA Retirement Process
• PERACare Overview
• Providing for Others: PERA or Life Insurance?
• Taxes on PERA Benefits
• Working After Retirement

• Give the Final Six Months’ Salary Report to your employer. After PERA processes it, you will be sent a benefit summary, usually in the effective month of your retirement.

• Ensure your service credit purchases are completed by the earlier of your termination of employment or retirement.

• Review coverage options under PERACare, PERA’s Health Benefits Program. If you wish to enroll, you must do so no later than 30 days after your first benefit payment is issued. Or, you may enroll during the annual open enrollment period, which starts October 1.

After Your Retirement Application is Processed

• Review your first benefit payment, issued either on the last business day of the month in which your retirement is effective or the last business day of the month in which your retirement is processed, whichever is later.

• Request in writing any change to your benefit option or cobeneficiary, if applicable.

Preparing for Retirement

Keep Your Employer Informed

Since your employer is an important part of your retirement process, be sure to keep your payroll/personnel office informed of your retirement plans. Find out if you are eligible for any post-retirement benefits or programs from your employer and coordinate health care and life insurance coverage, if needed.

Request a Benefit Estimate

One year before retirement, request a benefit estimate from PERA. The following information is needed:

• Your address, job title, and Social Security number.

• Your anticipated date of retirement and your last day on the job.

• Your cobeneficiary’s birthdate (if you need an estimate for an Option 2 or 3 under the PERA benefit structure or an Option P2 or P3 under the DPS benefit structure).

• If you anticipate any salary increases or decreases before retirement, please include the amounts and the dates of the salary changes.

• The number of months or years of service credit that you are planning to purchase, if applicable.

A benefit estimate sets forth only an estimated amount. Your retirement benefit will be based on your account information and PERA statutes and rules in effect at the time of your retirement.

Consider Purchasing Service Credit

If you have not purchased service credit during your PERA-covered career, it may still be beneficial for you to do so before retirement. Purchasing service credit increases your service credit and benefit amount, and may allow you to retire earlier and receive a higher health care subsidy. There are three ways to purchase service credit:

• Purchase service based on a refunded account. If you previously refunded an account and have not purchased the service credit associated with that refund, you may do so as long as you have one year of earned service credit.

• Purchase service for any employment not covered by PERA or another retirement program.

• Purchase service for any sabbatical leave during which you earned partial service credit. This does not apply to DPS benefit structure accounts.

Payments may be made in a lump-sum or installments, but must be completed by the earlier of your termination of employment or retirement. For more information about purchasing service credit, see the Purchasing Service Credit booklet.

Review Social Security Benefits

If you have been covered by Social Security at any time during your career, contact Social Security to receive an estimate of your benefit (if any). If you are eligible for a Social Security benefit, obtain information about two provisions that may reduce your Social Security benefit: (1) the Windfall Elimination Provision (WEP) and (2) the Government Pension Offset (GPO). Neither provision will reduce your PERA benefit. The PERA & Social Security brochure briefly explains these provisions.

Review Your Tax-Deferred Investments or Other Pensions

If you have contributed to the PERAPlus 401(k) Plan, PERAPlus 457 Plan, or other tax-deferred plans, you should find out what withdrawal options are available to you. (You cannot contribute to tax-deferred plans from pension income.) Also, check with other employers or retirement plans that you may have had to determine your eligibility for benefits.